Conventional Mortgage Loans in Utah

Conventional loans offer lower costs than other popular loan types and are a great choice for many homebuyers who meet the specific requirements. Discover what a conventional mortgage loan is, the different types, and if this loan option is right for you.

What is a conventional mortgage loan?

Conventional loans are the most common types of mortgages. These loans are not backed by a government agency and are originated and serviced by private mortgage lenders such as banks, and credit unions. They are then sold to government-sponsored enterprises like Fannie Mae or Freddie Mac.

Because conventional loan lenders are not protected by the government, credit score and debt-to-income requirements are more strict for conventional mortgage loans than for other types of loans. Most lenders will require a credit score between 620 and 660 in order for you to qualify. Additionally, if your down payment for a conventional loan is less than 20 percent, you will be required to pay private mortgage insurance (PMI) as part of your monthly payment. PMI is similar to insurance premiums required on other types of loans, and protects lenders if the buyer defaults on the loan.

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What are the different types of conventional mortgage loans?

Conventional loans can fall under the categories of “conforming” or “non-conforming”.

Conforming conventional mortgages are loans that meet specific standards in order to be bought by a government-sponsored enterprise (GSE), like Fannie Mae or Freddie Mac. Many GSE’s have certain requirements for the types of mortgages they’ll buy to ensure that the mortgage market is made up of creditworthy mortgages.

Non-conforming conventional mortgages are loans that lenders are unable to sell to Fannie Mae or Freddie Mac. When this is the case, lenders can either keep this loan in their portfolio or sell it to a private investor. Many non-conforming loans occur because the loan amount is above the FHFA’s limit for conforming loans. In most areas in the U.S. in 2021, you can’t get a conforming loan for an amount larger than $548,250, and will have to apply for a type of non-conforming loan called a jumbo loan.

What do I qualify for?

What are the rates, requirements, and down payments for a conventional mortgage loan?


Conventional mortgage loans can have fixed or adjustable rates. If you have a fixed rate, your interest rate and payment will remain the same for the entire life of the loan. If you have an adjustable rate, your rate may change based on fluctuations in the market.

Oftentimes conventional mortgages have lower rates than other popular loan types. To get the best rate possible, you may need to take time to improve your credit score, lower your debt-to-income (DTI) or save more money for a down payment before applying for a mortgage.


In most cases, conventional mortgage loans may require a credit score of at least 620, as discussed earlier, a loan size of less than $548,250 (with exceptions for Alaska, Hawaii and high-cost areas), and a DTI of 50% or less. DTI requirements for nonconforming loans may also be lower than the requirements for conforming loans, depending on the individual lender.

You can calculate your DTI by adding up the minimum monthly payments on all your debts (like student loans, auto loans and credit cards) and dividing it by your gross monthly income.

Down Payments

Additionally, first-time home buyers can get a conventional mortgage with a down payment as low as 3%; however, the down payment requirement can vary based on your personal situation and the type of loan or property you’re getting.

If you’re not a first-time home buyer or making not more than 80% of the median income in your area, the down payment requirement is 5%. If the home you’re buying is not a single-family home (i.e., it has more than one unit), you may need to put down 15%. If you’re buying a second home, you’ll need to put at least 10% down. If you’re getting an adjustable rate mortgage, the down payment requirement is 5%. If you’re getting a jumbo loan, the down payment requirement ranges from 20% to 40%.

A mortgage calculator can help you determine how your down payment amount will affect your future monthly payments.

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Is a conventional mortgage loan right for me?

Conventional mortgages are the most common loan types that buyers take advantage of due to historically lower overall costs. If you meet credit requirements and have at least 3% cash for a down payment, you may also be able to take advantage of this loan option. Our helpful team of loan officers at Integrity First Lending can help you decide if a conventional loan is the best fit for you with an in person phone call and consultation.

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